Leadership and the Law of Requisite Variety

Below is an excerpt from an executive session for bank board of directors by Ross Dawson, offering insights into the Law of Requisite Variety and how it can be applied to leadership in building sustainable organizations.

Full Transcription: Leadership and the Law of Requisite Variety

Ross Dawson:

The Law of Requisite Variety tells us that only those who are as flexible as their environment actually have any choice. If the world is moving faster than you are, you are entirely subject to those changes. It is only if you are as flexible and as adaptable as the world around you, you can actually make a choice and exert it. And that’s very challenging, given the pace of change and the flexibility of the environment around us.

So leadership is firstly about being able to foster those conditions, of individuals working together, different types of organizations being able to be respond and adapt, this requires experimentation – experimentation means things going wrong, it requires encouragement of experimentation, it requires governance processes that focus on what I describe as governance for transformation. Governance is critical because there are risks, yet unless governance enables an organization to transform itself, it is broken, it is dysfunctional. I think that if you look across economies and societies, in Asia and around the world, the critical thing is whether you can have processes that allow organizations to truly transform themselves.